Hospitals marked up prices for emergency, anesthesiology services, study finds

billing statement from a doctor's office
A new study found that the prices for anesthesiology and emergency medicine in hospitals were marked up far beyond inflation. (9dream studio/Shutterstock)

The prices for emergency medicine and anesthesiology services, the two most common sources of surprise medical bills, increased significantly in hospitals in recent years, a new study found.

The study, published Monday in JAMA Internal Medicine, examines markups greater than Medicare reimbursement across 2,042 U.S. hospitals. The study comes as Congress is considering how to eliminate surprise medical bills that come from out-of-network charges.

The study looked at changes in hospital markups from 2012 to 2016 for the emergency department, anesthesiology services and internal medicine.

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Researchers examined the markup ratio, which charges out-of-network patients based on the rate of Medicare reimbursement. For instance, a markup ratio of 4.5 means “that for every $100 in Medicare reimbursement, the hospital charged $450 to out-of-network patients, a 350% markup.”

RELATED: House committee chairman floats compromise to tackle surprise medical bills

From 2012 to 2016, the markup ratio for emergency department trips increased from 3.9 to 5.1.

The ratio for anesthesiology services also increased from 6.1 in 2012 to 7.4 in 2016.

Researchers also looked at the markup rate for internal medicine and found that the markup ratio increased from 2.1 to 2.4 over the same time period.

The markups “far exceeded economic inflation,” the study said.

“These findings are particularly worrisome given that the incidence of emergency department surprise medical bills increased from 32% to 43% between 2010 and 2016,” researchers added.

The study conceded that the claims examined reflect only the billed charge, which could have been negotiated down by the patient. It also focuses just on physician fees and not on the facility fees charged by hospitals.

RELATED: AMA, MGMA to Congress: Don't hand power to insurers in surprise billing fix

Ending surprise medical bills has bipartisan support in Congress, and committees in the House and Senate have passed legislation to address them. However, neither bill has gotten a vote in their respective chamber because of intense lobbying from provider groups upset over how they would be paid.

Both bills would create a benchmark rate tied to a geographic area that hospitals and physicians must use to charge for out-of-network rates. However, physicians and hospitals are pushing for a “baseball-style” arbitration method instead that would require both the provider and insurer to submit their own out-of-network rate and an arbiter to choose one of them.

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